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The interest rate that commercial banks charge each other for overnight loans is the:

AHome mortgage rate
BFederal funds rate
CDiscount window rate
DPrime lending rate
Answer & Solution
Correct answer: B. Federal funds rate
1. The name is a misnomer. 2. It is the federal funds rate. 3. The Fed targets it with open market operations. _Source: OpenStax Principles of Macroeconomics for AP Courses 2e, Chapter 14, Monetary Policy and Bank Regulation (CC BY 4.0)._
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